Data Snapshot: Coffee Farmer Income

Around 80% of the world’s coffee is produced by 17.7 million small-scale coffee farmers. And while the coffee industry aims to be a sustainability leader, the fact is that many farmers continue to struggle to make ends meet and support their families.

New research finds that the future of coffee depends on adequate income for farmers. A pilot study by Fairtrade International and True Price shows that despite sustainability pledges in the coffee sector, many coffee farmers struggle to make ends meet.

Key findings from the report include:

Reliance on coffee farming for household income

For many farmers, coffee is just one source of income and their dependence on it varies greatly. On average, about 50% of household income results from coffee production.

However results differed between countries: Farmers in Indonesia rely heavily on income from coffee for example, whereas Kenyan farmers mainly earn a living from sales of other farm goods or other employment away from the farm.

Attaining a living income

On average, coffee farmers in India, Indonesia, and Vietnam earn a living household income.

Only Indonesian farmers currently earn a living household income from coffee production alone, according to the study.

Differing household incomes between countries

Overall household income depends very much on the local context. This study shows that Indonesian and Vietnamese coffee farmers have the highest household incomes, mainly due to high income from coffee.

While some Kenyan farmers are making a profit on on their farms, on average Kenyan farmers produce coffee at a loss.

Ability to pay workers a living wage

A ‘value added analysis’ revealed that farmers in India and Indonesia are able to provide their hired workers with a living wage using their coffee income. (In Kenya and Vietnam, this is not currently the case.)

Source: Fairtrade America

Next Steps

This study lays out the ground work for understanding the current situation of coffee farmers, but at the same time it has exposed new focus areas that require further analysis, such as causal relationships between a number of variables that influence coffee farmer household income and/or coffee profitability.

The data shows that farmers’ realities are very diverse, and the specialization of coffee production varies per country. Farmers’ reliance on coffee to support their livelihoods, and the profitability of coffee versus other products also differs widely from country to country.

Going forward, Fairtrade is considering regional strategies and/or tailor-made pathways to improve income. A major next step will be to develop fit-for-purpose benchmarks and refine [Fairtrade’s] living income methodology.